Borders administration likely 'within hours'

Borders UK, the 45-store book retailer, is likely to be placed into
administration on Thursday, according to sources in the book industry.

Borders administration likely 'within hours'Photo: Bloomberg News

By James Hall

4:15PM GMT 25 Nov 2009

The chain could be placed into administration as soon as Thursday morning after last-ditch efforts to find a buyer for the chain looked destined to fail.

BDO Stoy Hayward has been lined up as administrator.

The chain, which has suffered from falling sales over recent years due to pressure from supermarkets and the internet, has been badly affected by the withdrawal of supplies from publishers over recent days. The company’s website has not been taking orders since the start of the week.

It is believed that should administrators be appointed, they will try to sell the business piecemeal or as a going concern. Waterstone's, the chain owned by HMV Group, is thought to be interested in a number of shops.

It emerged on Wednesday that The Publishers Association, the publishing industry’s trade body, had established a committee under Peter Roche, Hachette UK’s deputy chief executive, in an attempt to find a way for publishers to continue trading with the chain. The publishing industry is keen for the chain to survive as it enters the busiest month of the year.

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Borders was bought by its own management from Risk Capital, Luke Johnson’s private equity company, earlier this year. The management was backed by Valco, the private equity arm of Hilco, the restructuring specialists.

The failure of Borders today would be ironic. It was precisely one year ago tomorrow that the board of Woolworths, the high street retailer, put the company into administration.